IRS YouTube Video:
New Security Measures Help Protect Against Tax-Related Identity Theft  English

WASHINGTON – As part of the Security Summit effort, the Internal Revenue Service announced today that starting in January the Identity Protection PIN Opt-In Program will be expanded to all taxpayers who can properly verify their identities.

The Summit partners, including state tax agencies, the nation’s tax industry and the IRS, marked the third day of the National Tax Security Awareness Week by urging taxpayers who want the proactive protection against identity theft to opt into the Identity Protection PIN program in 2021.

The IP PIN is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. An IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return. The online Get An IP PIN tool at IRS.gov/IPPIN immediately displays the taxpayer’s IP PIN.

“When you have this special code, it prevents someone else from filing a tax return with your Social Security number,” said IRS Commissioner Chuck Rettig. “The fastest way to get an Identity Protection PIN is to use our online tool but remember you must pass a rigorous authentication process. We must know that the person asking for the IP PIN is the legitimate taxpayer.”

The online tool uses Secure Access authentication which uses several different ways to verify a person’s identity. Before using the “Get an IP PIN” tool, the IRS encourages taxpayers to review the requirements at IRS.gov/SecureAccess.

For those who cannot pass Secure Access authentication, there are alternatives. Taxpayers with incomes of $72,000 or less and with access to a telephone should complete Form 15227 and mail or fax it to the IRS. An IRS assistor will call the taxpayer to verify their identity with a series of questions. For additional security reasons, taxpayers who pass authentication will receive an IP PIN the following tax year.

Taxpayers who cannot verify their identities remotely or who are ineligible to file a Form 15227 may make an appointment, visit a Taxpayer Assistance Center and bring two forms of picture identification. Because this is an in-person identity verification, an IP PIN will be mailed to the taxpayer within three weeks.

Taxpayers who obtain an IP PIN should never share their code with anyone but their trusted tax provider. The IRS will never call to request the taxpayer’s IP PIN, and taxpayers must be alert to potential IP PIN scams.

Here’s what taxpayers need to know about the IP PIN before applying:

There is no change in the IP PIN program for confirmed victims of tax-related identity theft. Those taxpayers should still file a Form 14039 if their e-filed tax return rejects because of a duplicate SSN filing. The IRS will investigate their case and once the fraudulent tax return is removed from their account, confirmed victims automatically will receive an IP PIN via postal mail at the start of the next calendar year.

IP PINs will be mailed annually to confirmed victims only and participants enrolled prior to 2019. Because of security risks, confirmed identity theft victims cannot opt out of the IP PIN program. Confirmed victims also can use the Get an IP PIN tool to retrieve lost IP PINs assigned to them.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the third in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details.

On this Giving Tuesday, taxpayers are reminded there’s a special tax deduction available through Dec. 31, 2020 for the many people who give cash donations up to $300 to qualifying charities. Continue reading here or for Spanish here.

“A Closer Look” is a column from IRS executives that covers a variety of timely issues of interest to taxpayers and the tax community. It also provides a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

Check here for prior posts and new updates.

IRS YouTube Video:
New Security Measures Help Protect Against Tax-Related Identity Theft  English

WASHINGTON – The Internal Revenue Service, state tax agencies and the tax industry today marked the second day of National Tax Security Awareness Week by announcing an improved feature that will be available on all 2021 online tax preparation products.

Designed to protect both taxpayers and tax professionals, multi-factor authentication means the returning user must enter two pieces of data to securely access an account or application. For example, taxpayers must enter their credentials (username and password) plus a numerical code sent as a text to their mobile phone.

The agreement to add the multi-factor authentication feature is just one publicly visible example of the ongoing collaboration by the IRS, state tax agencies and the tax industry, which work together as the Security Summit. 2020 marks the fifth year of the Security Summit and of National Tax Security Awareness Week.

“Multi-factor authentication option is an easy, free way to really step up protection of your data whether you’re a taxpayer or a tax professional,” said Chuck Rettig, IRS Commissioner. “This is an important step being taken by the tax software industry. This is just one example of the many actions taken by the Summit partners over the past five years that have dramatically improved our ability to combat identity thieves and to protect taxpayers.”

Some online products previously offered multi-factor authentication. However, for 2021 all providers agreed to make it a standard feature and all agreed that it would meet requirements set by the National Institute of Standards and Technology. Multi-factor authentication may not be available on over-the-counter hard disk tax products.

Because the multi-factor authentication option is voluntary, Summit partners urged both taxpayers and tax professionals to use it. Multi-factor authentication can reduce the likelihood of identity theft by making it difficult for thieves to get access to sensitive accounts.

Users should check the security section in their online tax product account to make the change. It may be labeled as two-factor authentication or two-step verification or similar names.

Use of multi-factor authentication is especially important for tax professionals who continue to be prime targets of identity thieves. Of the numerous data thefts reported to the IRS from tax professional offices this year, most could have been avoided had the practitioner used multi-factor authentication to protect tax software accounts.

Thieves use a variety of scams – but most commonly by a phishing email – to download malicious software, such as keystroke software. This malware will eventually enable them to steal all passwords from a tax pro. Once the thief has accessed the practitioner's networks and tax software account, they will complete pending taxpayer returns, alter refund information and use the practitioner's own e-filing and preparer numbers to file the fraudulent return – a dangerous combination.

However, with multi-factor authentication, it's unlikely the thief will have stolen the practitioner's cell phone — blocking the ability to receive the necessary security code to access the account. This protects the tax pro's account information.

There are multiple options for multi-factor authentication. For example, taxpayers and tax practitioners can download an authentication app to their mobile device. These apps are readily available through Google Play or Apple’s App Store. Once properly configured, these apps will generate a temporary, single-use security code, which the user must enter into their tax software to complete authentication. Use a search engine for "Authentication apps" to learn more.

Other options include codes that may be sent to practitioner's email or mobile phone via text but those are not as secure as an authentication app.

While no product is fool-proof, multi-factor authentication does dramatically reduce the likelihood that taxpayers or tax practitioners will become victims. Multi-factor authentication should be used wherever it is offered. For example, financial accounts, social media accounts, cloud storage accounts and popular email providers all offer multi-factor authentication options.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the second in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details.

IRS YouTube Video:
New Security Measures Help Protect Against Tax-Related Identity Theft  English

WASHINGTON — The Internal Revenue Service and the Security Summit partners today issued warnings to all taxpayers and tax professionals to beware of scams and identity theft schemes by criminals taking advantage of the combination of holiday shopping, the approaching tax season and coronavirus concerns.

The IRS, state tax agencies and the tax industry opened the National Tax Security Awareness Week to coincide with Cyber Monday, the traditional start of the online holiday shopping season. But the holiday shopping season combined with the impending tax season and an increased trend toward working remotely make online security an absolute necessity.

“This is generally the hunting season for online thieves, but this year there’s a dangerous combination of factors at play that should make people more alert,” said IRS Commissioner Chuck Rettig. “The combination of online holiday shopping, the approaching filing season and more of us are working remotely puts people more at risk.  People can help avoid becoming victims of scams or identity thefts, by taking a few simple steps to help protect sensitive tax and financial information.”

The IRS, state tax agencies and the nation's tax industry – working together as the Security Summit – mark the start of the 5th annual National Tax Security Awareness Week with tips on basic safeguards everyone should take.

The special week includes special informational graphics and social media efforts on platforms including Twitter and Instagram.

Here are a few basic steps everyone should remember during the holidays and as the 2021 tax season approaches:

In addition, the Summit partners note these security measures include mobile phones – an area that people sometimes can overlook. Thieves have become more adept at compromising mobile phones. Phone users also are more prone to open a scam email from their phone than from their computer.

Taxpayers can check out security recommendations for their specific mobile phone by reviewing the Federal Communications Commission's Smartphone Security Checker. Since phones are used for shopping and even for doing taxes, remember to make sure phones and tablets are just as secure as computers.

The IRS will not call, text or email about your Economic Impact Payment or your tax refund. Nor will the IRS call with threats of jail or lawsuits over unpaid taxes. Those are scams.

The Federal Bureau of Investigation issued warnings earlier about fraud and scams related to the pandemic. It specifically warned of COVID-19 schemes related to taxes, anti-body testing, healthcare fraud, cryptocurrency fraud and others. COVID-related fraud complaints can be filed at the National Center for Disaster Fraud.

The Federal Trade Commission also has issued alerts about fraudulent emails claiming to be from the Centers for Disease Control or the World Health Organization. Consumers can keep atop the latest scam information and report COVID-related scams at www.FTC.gov/coronavirus.

The IRS, state tax agencies, the private sector tax industry, including tax professionals, work in partnership as the Security Summit to help protect taxpayers from identity theft and refund fraud. This is the first in a week-long series of tips to raise awareness about identity theft. See IRS.gov/securitysummit for more details.

WASHINGTON – The Internal Revenue Service today reminded taxpayers of a special new provision that will allow more people to easily deduct up to $300 in donations to qualifying charities this year.

Following special tax law changes made earlier this year, cash donations of up to $300 made before Dec. 31, 2020, are now deductible when people file their taxes in 2021.

“Our nation’s charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get,” said IRS Commissioner Chuck Rettig. “The IRS reminds people there’s a new provision that allows for up to $300 in cash donations to qualifying organizations to be deducted from income. We encourage people to explore this option to help deserving tax-exempt organizations – and the people and causes they serve.”

The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted last spring, includes several temporary tax changes helping charities, including the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.

Nearly nine in 10 taxpayers now take the standard deduction and could potentially qualify for this new tax deduction. In tax-year 2018, the most recent year for which complete figures are available, more than 134 million taxpayers claimed the standard deduction, just over 87% of all filers.

Under this new change, individual taxpayers can claim an “above-the-line” deduction of up to $300 for cash donations made to charity during 2020. This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.

Before making a donation, the IRS reminds people they can check the special Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.

Cash donations include those made by check, credit card or debit card. They don’t include securities, household items or other property. Though cash contributions to most charitable organizations qualify, some do not. Check Publication 526, Charitable Contributions, and the TEOS for more information.

Though cash contributions to most charitable organizations qualify, those made to supporting organizations and donor-advised funds do not.

The IRS reminds everyone giving to charity to be sure to keep good records. By law, special recordkeeping rules apply to any taxpayer claiming a charitable contribution deduction. Usually, this includes obtaining a receipt or acknowledgement letter from the charity, before filing a return, and retaining a cancelled check or credit card receipt. For details on these recordkeeping rules, see Publication 526, available on IRS.gov.

In addition, the CARES Act includes other temporary provisions designed to help charities. These include higher charitable contribution limits for corporations, individuals who itemize their deductions and businesses that give food inventory to food banks and other eligible charities. For more information about these and other Coronavirus-related tax relief provisions, visit IRS.gov/Coronavirus.

Notice 2020-84 provides that the adjusted applicable dollar amount that applies for determining the PCORTF fee for policy years and plan years ending on or after October 1, 2020 and before October 1, 2021 is equal to $2.66. This adjusted applicable dollar amount has been determined using the percentage increase in the projected per capita amount of the National Health Expenditures published by HHS in March 2020. Sections 4375 and 4376, added to the Code by the Affordable Care Act, impose a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans to help fund the Patient-Centered Outcomes Research Trust Fund (PCORTF). The fee originally expired on October 1, 2019, but was extended by the Further Consolidated Appropriations Act, 2020, Pub. L. 116-94, 133 Stat. 2534 (2019).

Notice 2020-84 will be in IRB: 2020-51, dated 12/14/20.

WASHINGTON – The Internal Revenue Service today encouraged taxpayers to take necessary actions this fall to help file federal tax returns timely and accurately in 2021.

This is the second in a series of reminders to help taxpayers get ready for the upcoming tax filing season. A special page, updated and available on IRS.gov, outlines steps taxpayers can take now to make tax filing easier in 2021.

2020 has been a busy year, with a lot of changes. To make sure taxpayers don’t miss out on tax benefits or make mistakes, they can take a few simple steps now to make filing their taxes easier in 2021.

An important first step to getting taxes ready is to gather all tax records. Having records organized makes preparing a tax return easier. It may also help discover potentially overlooked deductions or credits.

Taxpayers with an Individual Tax Identification Number (ITIN) should ensure it hasn’t expired before filing a tax return in 2021. For example, ITINs not used on a federal tax return at least once in the last three years will expire on Dec. 31, 2020. If the ITIN has expired, IRS recommends taxpayers submit Form W-7, Application for IRS Individual Taxpayer Identification Number, now to renew an ITIN. Taxpayers who fail to renew ITINs before filing a tax return next year could face a delayed refund and may be ineligible for certain tax credits.

Time is running out to use the Tax Withholding Estimator, a tool on IRS.gov designed to help determine the right amount of tax to have withheld from paychecks. Taxpayers can use the Tax Withholding Estimator to help determine if adjustments to withholding are necessary.  Withholding changes can be made by submitting a new Form W-4 to the taxpayer’s employer.

Taxpayers receiving substantial amounts of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income, should make quarterly estimated tax payments. The last payment for 2020 is due on Jan. 15, 2021. Payment options can be found at IRS.gov/payments.

For more information, see Publication 5348, Get Ready to File, and Publication 5349, Year-Round Tax Planning is for Everyone.

WASHINGTON – The Internal Revenue Service’s Office of the Chief Procurement Officer today announced a research partnership with Data and Analytic Solutions, a small business located in Fairfax, Virginia. The partnership also includes a group of academic researchers with a goal to use data science to improve IRS procurement operations.

The effort will bring together a multi-disciplinary team comprised of procurement practitioners as well as university professors and students with procurement and machine learning experience. Machine learning is a form of artificial intelligence that allows computers to become more accurate at predicting outcomes without being explicitly programmed.

“As with many agencies, we have a wealth of data available to us to understand where time is being spent in our contracting process,” said Shanna Webbers, IRS Chief Procurement Officer. “The intent of this research project is to enable us to hone-in on key factors impacting our time to award and identify tools that can be utilized to make process improvements to shorten our lead time, more effectively allocate our human resources, and better serve our customers.”

One topic that researchers will examine is the length of time it takes to award a government contract. New regulations have standardized the lead time necessary to finalize a new contract procurement. That has resulted in the largest ever dataset on timeframes for federal contract awards. Using this information, researchers plan to examine nearly half a million contracts looking for ways to improve the process.

Overall, the goal is to enable federal agencies to buy mission-critical services at a speed similar to the private sector's contracting process. The IRS research partnership is intended to better understand the key factors impacting the time it takes to award contracts and how to execute contracts more efficiently.

The team will also try to improve the accuracy of an algorithm that predicts when individual procurement requests will become signed contracts. The partnership also plans to train contracting officials on best practices and grow a talent pipeline of acquisition professionals with data expertise.

The IRS reviewed its collection activities to see how it could provide relief for taxpayers who owe taxes but are struggling financially because of the pandemic. The agency is expanding taxpayer options for making payments and other ways to resolve tax debt.

Taxpayers who owe taxes always had options to get help through payment plans and other tools from the IRS. The new IRS Taxpayer Relief Initiative is expanding on those tools.

These revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time.

Here are the highlights of the Taxpayer Relief Initiative:

Additional tools to assist taxpayers who owe taxes:

Temporarily delaying collection — Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves.

Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise. To help determine eligibility, use the Offer in Compromise Pre-Qualifier tool. Now, the IRS is offering additional flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted offer in compromise.

Relief from penalties — Reasonable cause assistance is available for taxpayers with failure to file, pay and deposit penalties. First-time penalty abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.

Many taxpayers requesting payment plans, including Installment Agreements, can apply through IRS.gov.

These types of relief are not automatic. Taxpayers need to request payment relief by contacting the number on the their balance due notice or responding in writing.

Share this tip on social media -- #IRSTaxTip:COVID Tax Tip 2020-158: Taxpayer Relief Initiative aims to help those financially affected by COVID-19. https://go.usa.gov/x7UUT

Notice 2020-83 contains the 2020 Required Amendments List for qualified individually designed plans and § 403(b) individually designed plans. 

Notice 2020-83 will be in IRB:  2020-50, dated December 7, 2020.